US goods deficit hits record high in 2018
The US goods trade deficit surged to a record high in 2018 as strong domestic demand fueled by lower taxes pulled in imports, despite the Trump administration’s “America First” policies, including tariffs, aimed at shrinking the trade gap.
THE OVERALL TRADE DEFICIT SURGED TO $621 BILLION
US President Trump is pursuing a protectionist trade agenda to shield US manufacturing from what he says is unfair foreign competition. Trump, who has dubbed himself “the tariff man,” pledged on both the campaign trail and as president to reduce the deficit by shutting out more unfairly traded imports and renegotiating free trade agreements.
The Commerce Department said on Wednesday that a 12.4 percent jump in the goods deficit in December had contributed to the record $891.3 billion goods trade shortfall last year. The overall trade deficit surged 12.5 percent to $621.0 billion in 2018, the largest since 2008.
“The trade deficit exploded last year despite the Trump administration efforts to make America great again, and the trend is unlikely to get any better in 2019,” said Chris Rupkeychief economist at MUFG in New York.
The White House has argued that reducing the trade deficit would boost annual economic growth to its goal of 3 percent on a sustainable basis. The government also sought to stimulate the economy with a $1.5 trillion tax cut package, which jolted both consumer and business spending, helping to lift imported goods to a record $2.6 trillion in 2018.